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Vanguard's Global Wellesley Income and Global Wellington Funds in registration [now available]

Posted: Wed Jul 26, 2017 3:10 pm
by Billavoider
Credit to the poster at Mutual Fund Observer for posting this.

These funds are in registration.

https://www.sec.gov/Archives/edgar/data ... dfinal.htm

[edited thread title to show the funds are now listed on Vanguard's site - moderator prudent]

Re: Vanguard's Global Wellesley Income and Global Wellington Funds in registration

Posted: Wed Jul 26, 2017 4:11 pm
by JamesSFO
I was a bit surprised by the initial expense ratios but this is where Vanguard's "at cost" structure cuts against them, it should be a bit more expensive than the base funds but I think it was more like 2x as expensive. Certainly an intriguing proposition for Wellesley/Wellington fund lovers who want international exposure in a single fund.

Re: Vanguard's Global Wellesley Income and Global Wellington Funds in registration

Posted: Wed Jul 26, 2017 7:12 pm
by pkcrafter
Thanks for posting this information.

Paul

Re: Vanguard's Global Wellesley Income and Global Wellington Funds in registration

Posted: Wed Jul 26, 2017 8:59 pm
by columbia
Summary for a layman?

Re: Vanguard's Global Wellesley Income and Global Wellington Funds in registration

Posted: Wed Jul 26, 2017 9:09 pm
by user76586
columbia wrote:Summary for a layman?
The two Ws are active funds with about 1/3 and 2/3 in US equities, respectively, and the rest in US bonds. These funds will add international equities and bonds to the mix. Probably similarly to the active Global Equity fund that stays close to market cap weights but adjusts based on manager discretion.

Re: Vanguard's Global Wellesley Income and Global Wellington Funds in registration

Posted: Wed Jul 26, 2017 9:29 pm
by effillus
Both Wellesley and Wellington already have SOME foreign equities. Perhaps more will be added, plus the addition of international bonds.

Re: Vanguard's Global Wellesley Income and Global Wellington Funds in registration

Posted: Wed Jul 26, 2017 9:56 pm
by Tommy
Are those funds will replace existing or they are addition? Not clear why create 2 new funds with more international exposure, why not add more international to existing?

Re: Vanguard's Global Wellesley Income and Global Wellington Funds in registration

Posted: Wed Jul 26, 2017 10:07 pm
by tibbitts
Tommy wrote:Are those funds will replace existing or they are addition? Not clear why create 2 new funds with more international exposure, why not add more international to existing?
You've been reading this forum and ask that? The "never international" contingent would have have something to say about that. Not to mention that most people don't appreciate in general when a fund dramatically changes its objective, particularly a fund in which they may have serious capital gains. We get a lot of complaints when a TR fund changes its allocation by 10%, after all.

Re: Vanguard's Global Wellesley Income and Global Wellington Funds in registration

Posted: Wed Jul 26, 2017 10:08 pm
by dwickenh
Tommy wrote:Are those funds will replace existing or they are addition? Not clear why create 2 new funds with more international exposure, why not add more international to existing?
Some peeps don't want more international, so this way there is a one fund choice for both people.

I own some Wellesley in my IRA, but supplement with Foreign Index in my taxable.

Dan

Re: Vanguard's Global Wellesley Income and Global Wellington Funds in registration

Posted: Wed Jul 26, 2017 10:08 pm
by grabiner
JamesSFO wrote:I was a bit surprised by the initial expense ratios but this is where Vanguard's "at cost" structure cuts against them, it should be a bit more expensive than the base funds but I think it was more like 2x as expensive. Certainly an intriguing proposition for Wellesley/Wellington fund lovers who want international exposure in a single fund.
Vanguard's fund expenses decline as the funds get larger. These funds will start out small, but their expenses will decrease if they attract investors. This has happened with many new Vanguard funds, both active and index.

Another point of note: the benchmark is based on a global cap-weighted portfolio, which means that these funds may be about half foreign.
SEC fund registration wrote:The [Globeal Wellington] Index is a composite benchmark, weighted 65% in the FTSE Developed Equity Index and 35% in the Bloomberg Barclays Fixed Income Composite, which is comprised of 80% Bloomberg Barclays Global Aggregate Credit Index, 10% Bloomberg Barclays Global Aggregate Treasury Index, and 10% Bloomberg Barclays Global Aggregate Securitized Index (USD hedged).

Re: Vanguard's Global Wellesley Income and Global Wellington Funds in registration

Posted: Wed Jul 26, 2017 10:33 pm
by stemikger
I doubt this has Jack's blessing but would love to hear his comments.

Re: Vanguard's Global Wellesley Income and Global Wellington Funds in registration

Posted: Wed Jul 26, 2017 11:41 pm
by Longtermgrowth
Looks like by adding a decent percentage of international stocks and bonds, these funds are basically a conservative and aggressive actively managed LifeStrategy Fund focused on income...

Re: Vanguard's Global Wellesley Income and Global Wellington Funds in registration

Posted: Thu Jul 27, 2017 6:35 am
by Billavoider

Re: Vanguard's Global Wellesley Income and Global Wellington Funds in registration

Posted: Thu Jul 27, 2017 7:58 am
by lazydavid
Feels like performance chasing. International has been hot this year after a decade or so of nothing, and here we go with international-ized versions of their two flagship active funds. I'll stick with the original funds (which combined, make up a little more than half of our portfolio), both for the lower ER and because I'm already just slightly overweight in international compared to my AA. Will be interesting to watch though.

Re: Vanguard's Global Wellesley Income and Global Wellington Funds in registration

Posted: Thu Jul 27, 2017 8:01 am
by jbolden1517
stemikger wrote:I doubt this has Jack's blessing but would love to hear his comments.
Jack is not a big fan of MPT where mutual funds individually aren't always good investments in and of themselves but are designed to be used in combination with other funds. He thinks in practice this just encourages speculation and buy high sell low behavior from investors. He has spoken quite often about the days when mutual funds were designed for middle class investors to be directly invested in and how esoteric fund choices have harmed investors. There are people like me who get the question and generally like Wellington as a "this will keep you out of most of the junk, you can be safe investing in this and forgetting about it" but won't recommend it without a foreign component (my standard is SIP and Oakmark Global). This goes head to head with something like Blackrock's Global Asset Allocation (a huge fund) likely 80 basis points cheaper, and no TAA. How many 401k investors could just go 100% Wellington Global if that became a fund option? And let me say something even more controversial, how many small pension funds could just go 100% Wellington Global and drastically reduce their overhead?

Jack is opposed to 100% equity. He likes middle class investment vehicles. He knows his views on foreign are a deal breaker for some. He knows his neutrality on value vs. growth are a deal breaker for some. A disciplined approach to foreign currency exposure, which Wellington Global would provide, eliminates most of the long term risks. Low expenses, disciplined investing, no market timing, high quality assets... That very much keeping with Vanguard's and Jack's ideology. So I wouldn't be so sure Jack wouldn't approve. He personally loves indexing and TSM type investments. But let's not forget he started as Wellington's fund manager.

Re: Vanguard's Global Wellesley Income and Global Wellington Funds in registration

Posted: Thu Jul 27, 2017 3:56 pm
by Christine_NM
I can't make out the Global Wellesley stock benchmark. Prospectus says 35% "FTSE Developed High Dividend Yield Index" but there is no such index. (Google search returns 1 hit -- the prospectus itself!)

It must be FTSE All-World High Dividend Index?

Editing errors don't fill me with confidence. I want managers who know this stuff and could work in their sleep.

Re: Vanguard's Global Wellesley Income and Global Wellington Funds in registration

Posted: Thu Jul 27, 2017 4:45 pm
by stemikger
jbolden1517 wrote:
stemikger wrote:I doubt this has Jack's blessing but would love to hear his comments.
Jack is not a big fan of MPT where mutual funds individually aren't always good investments in and of themselves but are designed to be used in combination with other funds. He thinks in practice this just encourages speculation and buy high sell low behavior from investors. He has spoken quite often about the days when mutual funds were designed for middle class investors to be directly invested in and how esoteric fund choices have harmed investors. There are people like me who get the question and generally like Wellington as a "this will keep you out of most of the junk, you can be safe investing in this and forgetting about it" but won't recommend it without a foreign component (my standard is SIP and Oakmark Global). This goes head to head with something like Blackrock's Global Asset Allocation (a huge fund) likely 80 basis points cheaper, and no TAA. How many 401k investors could just go 100% Wellington Global if that became a fund option? And let me say something even more controversial, how many small pension funds could just go 100% Wellington Global and drastically reduce their overhead?

Jack is opposed to 100% equity. He likes middle class investment vehicles. He knows his views on foreign are a deal breaker for some. He knows his neutrality on value vs. growth are a deal breaker for some. A disciplined approach to foreign currency exposure, which Wellington Global would provide, eliminates most of the long term risks. Low expenses, disciplined investing, no market timing, high quality assets... That very much keeping with Vanguard's and Jack's ideology. So I wouldn't be so sure Jack wouldn't approve. He personally loves indexing and TSM type investments. But let's not forget he started as Wellington's fund manager.
I can see how beneficial this could be for many. Your reply was great. I personally rather be 100% in index funds and don't really want international because I drank the Jack Bogle cool-aid and agree it is not necessary. I plan to go all in with the Vanguard Balanced Index Fund.

Yes, Jack still owns Wellington because of the sentimental role it played in his life, but it still is a managed fund and probably he would not buy it today. Having said that, who can argue with Wellington's long term track record. If I wasn't such a zealot, I would have no problem owning it.

Re: Vanguard's Global Wellesley Income and Global Wellington Funds in registration

Posted: Thu Jul 27, 2017 9:43 pm
by GaryA505
After all the posts on percentage of foreign equity, I'll be very interested to see what percentage they use with these funds. Anybody wanna take a guess?

Re: Vanguard's Global Wellesley Income and Global Wellington Funds in registration

Posted: Thu Jul 27, 2017 10:02 pm
by abuss368
Vanguard is clearly making international bonds a key allocation within their funds.

Re: Vanguard's Global Wellesley Income and Global Wellington Funds in registration

Posted: Thu Jul 27, 2017 11:57 pm
by grabiner
GaryA505 wrote:After all the posts on percentage of foreign equity, I'll be very interested to see what percentage they use with these funds. Anybody wanna take a guess?
It surprised me that the press release didn't say, although this may be because of legal restrictions; the proposed prospectus didn't say either. The only basis for a guess is that the benchmark is a global index, which would be about half US; if the fund were following a more common 60/40 or 70/30 split, it would probably be benchmarked to that percentage of US and foreign indexes.

Re: Vanguard's Global Wellesley Income and Global Wellington Funds in registration

Posted: Sat Jul 29, 2017 5:40 am
by saltz1979
Wonder if Wellington and Wellesley will soon close to new investors altogether when the other two launch?

Re: Vanguard's Global Wellesley Income and Global Wellington Funds in registration

Posted: Sat Jul 29, 2017 6:50 am
by jbolden1517
saltz1979 wrote:Wonder if Wellington and Wellesley will soon close to new investors altogether when the other two launch?
I doubt it. These are different products. Vanguard isn't a house that keeps a small number of funds. No reason not to offer all four.

Re: Vanguard's Global Wellesley Income and Global Wellington Funds in registration

Posted: Sat Jul 29, 2017 7:41 am
by maj
Though we are invested 80% in index funds, we do have Wellington and Wellesley in tax-deferred accounts.
Wellington management is most careful regarding stock selection in general, and more so with international stocks.
I believe the Global versions will be welcomed by folks who want exposure to international stocks which are cream of the crop re
political stability, moat protection, and return on equity.
peace

Re: Vanguard's Global Wellesley Income and Global Wellington Funds in registration

Posted: Wed Aug 02, 2017 2:06 pm
by azanon
GaryA505 wrote:After all the posts on percentage of foreign equity, I'll be very interested to see what percentage they use with these funds. Anybody wanna take a guess?
It's going to be somewhere between 40-50% foreign equities, and probably 2:1 ratio of US to foreign bonds. On equities, 40% if they match Vanguard's official preference, or 50%ish if they use global market cap like their global equity stock fund.

I'm just really hoping they maintain the Value tilt for all of the equities!

Re: Vanguard's Global Wellesley Income and Global Wellington Funds in registration

Posted: Wed Aug 02, 2017 2:08 pm
by azanon
jbolden1517 wrote:
saltz1979 wrote:Wonder if Wellington and Wellesley will soon close to new investors altogether when the other two launch?
I doubt it. These are different products. Vanguard isn't a house that keeps a small number of funds. No reason not to offer all four.
That'd be sacrilege, and cause riots. Approximately 0% chance of that happening, give or take 0%.

Re: Vanguard's Global Wellesley Income and Global Wellington Funds in registration

Posted: Wed Aug 02, 2017 9:12 pm
by VaR
I didn't see any statement on whether the U.S. vs international allocation was going to be fixed by mandate or whether it would be adjusted as part of the active management based on some determination of value. Any thoughts on this?

Re: Vanguard's Global Wellesley Income and Global Wellington Funds in registration

Posted: Wed Aug 02, 2017 9:48 pm
by alec
VaR wrote:I didn't see any statement on whether the U.S. vs international allocation was going to be fixed by mandate or whether it would be adjusted as part of the active management based on some determination of value. Any thoughts on this?
It could be in the registration statement vanguard filed with the SEC.

Re: Vanguard's Global Wellesley Income and Global Wellington Funds in registration

Posted: Wed Aug 02, 2017 10:52 pm
by tj
No "Global Equity Income"? That's a bit surprising.

Re: Vanguard's Global Wellesley Income and Global Wellington Funds in registration

Posted: Thu Aug 03, 2017 9:17 am
by maj
tj
I concur.
I hope to see a global dividend appreciation index fund/etf
and a global high dividend yield index fund/etf
peace

Re: Vanguard's Global Wellesley Income and Global Wellington Funds in registration

Posted: Mon Sep 11, 2017 8:59 am
by SirRunsabit
I'm excited for Global Wellington. Should be a decent fund, a compliment for those who have high Wellington percentages and want some international exposure without all the asset allocation work. I have some faith in the management team.

Re: Vanguard's Global Wellesley Income and Global Wellington Funds in registration

Posted: Thu Oct 12, 2017 1:46 pm
by azanon
Does anyone know an easy way I can track when these will be launched? I asked Vanguard on their facebook page when the launch is, and the response was "mid-october". I asked if there was any way to invest prior to launch, and the answer was no. So, so far the only way I know how to track this is to go to Vanguard's site at least once per day and see if it's listed. Is there an easier way to keep tabs?

Re: Vanguard's Global Wellesley Income and Global Wellington Funds in registration

Posted: Thu Oct 12, 2017 2:47 pm
by dh
azanon wrote:
Thu Oct 12, 2017 1:46 pm
Does anyone know an easy way I can track when these will be launched? I asked Vanguard on their facebook page when the launch is, and the response was "mid-october". I asked if there was any way to invest prior to launch, and the answer was no. So, so far the only way I know how to track this is to go to Vanguard's site at least once per day and see if it's listed. Is there an easier way to keep tabs?
The response you received in more specific than what I heard ("sometime in the 4th quarter"). I doubt there is a better way to track the opening for the fund. I am going to rely on people commenting here at Bogleheads in regards to it opening.

Re: Vanguard's Global Wellesley Income and Global Wellington Funds in registration

Posted: Thu Oct 12, 2017 3:02 pm
by azanon
dh wrote:
Thu Oct 12, 2017 2:47 pm
azanon wrote:
Thu Oct 12, 2017 1:46 pm
Does anyone know an easy way I can track when these will be launched? I asked Vanguard on their facebook page when the launch is, and the response was "mid-october". I asked if there was any way to invest prior to launch, and the answer was no. So, so far the only way I know how to track this is to go to Vanguard's site at least once per day and see if it's listed. Is there an easier way to keep tabs?
The response you received in more specific than what I heard ("sometime in the 4th quarter"). I doubt there is a better way to track the opening for the fund. I am going to rely on people commenting here at Bogleheads in regards to it opening.
Yeah that was as of yesterday. I just clicked the message button at Vanguard facebook, and "Emily" replied back with that information.

Re: Vanguard's Global Wellesley Income and Global Wellington Funds in registration

Posted: Thu Oct 12, 2017 3:27 pm
by SirRunsabit
Been checking daily myself.

Glad to see other folks are excited too. :sharebeer

Re: Vanguard's Global Wellesley Income and Global Wellington Funds in registration

Posted: Thu Oct 12, 2017 5:13 pm
by azanon
SirRunsabit wrote:
Thu Oct 12, 2017 3:27 pm
Been checking daily myself.

Glad to see other folks are excited too. :sharebeer
Yup. I plan to dump quite a bit of $$ into Global Wellington. :mrgreen:

Re: Vanguard's Global Wellesley Income and Global Wellington Funds in registration

Posted: Thu Oct 12, 2017 8:12 pm
by naha66
What kind of experience does Wellington have in international investing?

Re: Vanguard's Global Wellesley Income and Global Wellington Funds in registration

Posted: Thu Oct 12, 2017 8:30 pm
by tj
I would hope you don't invest in it until they are fully invested. Otherwise you just have an expensive cash fund. :D


Wellington does some internatinoal work for The Hartford. Wellington is also one of the managers of Vanguard's active Emerging Markets fund.

Re: Vanguard's Global Wellesley Income and Global Wellington Funds in registration

Posted: Fri Oct 13, 2017 6:10 am
by dkturner
naha66 wrote:
Thu Oct 12, 2017 8:12 pm
What kind of experience does Wellington have in international investing?
Vanguard's Equity Income, Wellesley and Wellington Fund are all managed by Wellington Management. For as long as I have owned these funds (about 18 years) they have contained varying allocations to international equities, primarily European. I think they have sufficient experience with international markets to make a go of it.

Re: Vanguard's Global Wellesley Income and Global Wellington Funds in registration

Posted: Fri Oct 13, 2017 7:26 am
by azanon
naha66 wrote:
Thu Oct 12, 2017 8:12 pm
What kind of experience does Wellington have in international investing?
Considering they have offices located in Beijing, Frankfurt, Hong Kong, London, Singapore, Sydney, Tokyo, Luxembourg, and Zurich, I'm hoping at least a fair bit of experience.

Re: Vanguard's Global Wellesley Income and Global Wellington Funds in registration

Posted: Fri Oct 13, 2017 8:34 pm
by Dead Man Walking
naha66 wrote:
Thu Oct 12, 2017 8:12 pm
What kind of experience does Wellington have in international investing?
Wellington Management is one of the managers for Vanguard's International Explorer Fund.

Re: Vanguard's Global Wellesley Income and Global Wellington Funds in registration

Posted: Sat Oct 14, 2017 4:54 pm
by Billavoider
Here is the 10/10/17 prospectus link:

https://www.sec.gov/Archives/edgar/data ... merged.htm

Re: Vanguard's Global Wellesley Income and Global Wellington Funds in registration

Posted: Sat Oct 14, 2017 9:00 pm
by tj
Billavoider wrote:
Sat Oct 14, 2017 4:54 pm
Here is the 10/10/17 prospectus link:

https://www.sec.gov/Archives/edgar/data ... merged.htm
Interesting that the equity managers listed are none of the named managers for the domestic funds.

Re: Vanguard's Global Wellesley Income and Global Wellington Funds in registration

Posted: Sat Oct 14, 2017 9:28 pm
by lack_ey
tj wrote:
Sat Oct 14, 2017 9:00 pm
Interesting that the equity managers listed are none of the named managers for the domestic funds.
The domestic funds are kind of soft closed, right? I don't think that's over the fixed income side getting too large to handle.

Re: Vanguard's Global Wellesley Income and Global Wellington Funds in registration

Posted: Sat Oct 14, 2017 9:49 pm
by tj
lack_ey wrote:
Sat Oct 14, 2017 9:28 pm
tj wrote:
Sat Oct 14, 2017 9:00 pm
Interesting that the equity managers listed are none of the named managers for the domestic funds.
The domestic funds are kind of soft closed, right? I don't think that's over the fixed income side getting too large to handle.
Wellington might be. I didn't think Wellesley was.

Dividend Growth is closed and Equity Income, while not closed, Vanguard has it's own managers manage part of it.

Re: Vanguard's Global Wellesley Income and Global Wellington Funds in registration

Posted: Mon Oct 16, 2017 7:50 pm
by jackfromma
Neither Wellington nor Wellesley are closed, and I hold both of them in my IRA. If the new funds live up to the existing W&W and their potential, they would be worth a significant place in the active part of my portfolio, possibly replacing the domestic W&W, depending on the asset allocation.

Re: Vanguard's Global Wellesley Income and Global Wellington Funds in registration

Posted: Mon Oct 16, 2017 8:10 pm
by lack_ey
tj wrote:
Sat Oct 14, 2017 9:49 pm
lack_ey wrote:
Sat Oct 14, 2017 9:28 pm
tj wrote:
Sat Oct 14, 2017 9:00 pm
Interesting that the equity managers listed are none of the named managers for the domestic funds.
The domestic funds are kind of soft closed, right? I don't think that's over the fixed income side getting too large to handle.
Wellington might be. I didn't think Wellesley was.

Dividend Growth is closed and Equity Income, while not closed, Vanguard has it's own managers manage part of it.
You're right. It was just Wellington that closed to institutional investors and financial advisors, not both of them. And maybe to others?

jackfromma wrote:
Mon Oct 16, 2017 7:50 pm
Neither Wellington nor Wellesley are closed, and I hold both of them in my IRA. If the new funds live up to the existing W&W and their potential, they would be worth a significant place in the active part of my portfolio, possibly replacing the domestic W&W, depending on the asset allocation.
If it's a Vanguard IRA, sure, hence the language of "kind of soft closed" (I really should have specified more, shouldn't I?). Or are you with a different broker? For example I see in some places Wellington being shown as closed to new investors in those platforms, which was the meaning intended but apparently I was expecting too much out of everyone else to be total mind readers (drat). My impression was that it was only really being offered at Vanguard brokerage services to retail clients, to existing clients, and maybe a few exceptions.

Re: Vanguard's Global Wellesley Income and Global Wellington Funds in registration

Posted: Tue Oct 17, 2017 4:24 pm
by FactualFran
Today (Oct. 17, 2017) Vanguard filed with the SEC a supplement to the previously filed prospectus for each of the new funds that each fund: "is holding a subscription period from October 18, 2017, through November 1, 2017. During this period, the Fund will invest in money market instruments rather than seek to achieve its investment objective. This strategy should allow the Fund to accumulate sufficient assets to construct a complete portfolio within a single day and is expected to reduce initial trading costs."

Re: Vanguard's Global Wellesley Income and Global Wellington Funds in registration

Posted: Tue Oct 17, 2017 4:53 pm
by SirRunsabit
Here it comes. :happy

Re: Vanguard's Global Wellesley Income and Global Wellington Funds in registration

Posted: Wed Oct 18, 2017 1:35 am
by SirRunsabit
:beer they're on the site. Enjoy!

Re: Vanguard's Global Wellesley Income and Global Wellington Funds in registration

Posted: Wed Oct 18, 2017 3:05 am
by GMan82
Hmm. This is an interesting prospect. I currently manage my mother's small taxable account for her. $40k basis worth about $47k now. Acct opened around Christmas 2015. It is invested 60/40 with 25% of stocks international and 10% stocks as REITS in 3-fund + REITS. She has no income to declare so the taxation is small and the cap gains if any minimal.

I'm wondering if it's worth transferring all into the Global Wellington Fund, set to automatically re-invest. The ER goes up for sure, but this way it becomes TRUE buy and hold, and easy to set and forget.

I'm thinking of using either this or the LifeStrategy Moderate fund for her. She wants to let the money sit untouched. Either strategy lets me forget the account even exists, because now each quarter I go and reinvest manually the dividends into the lagging sector.

Any suggestions on Global Wellington or LifeStrategy Moderate? It's the 40% in international that I didn't like much. I'd rather 25-30% international max. Downside is the ER of the Global Wellington, but I can probably find $2k to get the admiral share.